caLogo

HERTFORDSHIRE, UK – Worldwide consumer electronics sales grew 0.3% in 2016 to reach $673 billion, on track to achieve 1.7% CAGR through 2021, according to Futuresource Consulting.

The firm notes an overall slowdown in the CE market, with many brands concerned about future growth due to increasing hardware commoditization.

"It's a harsh landscape, but there are patches of sunshine," said Jack Wetherill, principal analyst at Futuresource Consulting. "We're seeing growth in some TV/AV products, with digital media adaptors/media streamers, home audio and headphones attracting much-needed consumer attention.

"After a promising start, the wearables sector took a revenue hit in 2016, with the Apple Watch waning and lower-priced health and fitness devices taking control. However, there's plenty of life left in the category, and next year we'll see a turnaround. Look out for devices that differentiate themselves from mobile, particularly in the smartwatch category, and marketing messages that accentuate the differences and tap into the mainstream. Our forecasts show strong wearables growth out to 2021 and beyond, with a CAGR of 14%."

Mobile now delivers 50% of total global consumer electronics revenues, with smartphones surpassing 1.6 billion units and trade value growing 4% in 2016. By 2021, mobile will be worth more than $360 billion, says the firm.

The TV displays market was hit hard last year, with market value falling by more than $1 billion. However, consumer appetite for more expensive sets and a shift to 4K UHD will bring a reversal of fortune, says Futuresource. The firm forecasts a total AV category market value in excess of $150 billion by 2021, with TV displays accounting for most of the value growth.

Smart home continues to develop, with fragmentation and lack of interoperability across rival ecosystems becoming less of a concern.
Integration between devices and connectivity protocols are establishing themselves and paving the way for whole-home ecosystems. Although the category will only contribute a small slice to overall CE revenues, it is an attractive new battleground that presents an additional revenue stream for brands, OEMs and service providers alike.

On a worldwide scale, CE market growth is beginning to reach an equilibrium, says the firm. Previous deterioration in developed markets has been reversed, but the recent growth in emerging markets is on a slowdown, despite a few pockets of sector growth.

"Last month China received its second credit rating downgrade of the year," said Simon Bryant, associate director of consumer electronics at Futuresource. "This reveals the extent of current economic difficulties, amid fears that rising debts are adding to economic and financial risks. There's no doubt this turbulence will continue to influence the global game.

"Now, more than ever before, the outlook for companies operating in this arena will be determined by the strength of their business planning. The strategic decisions they make, both on a category level and by bringing geographical opportunities into hard focus, are central to survival and will define their future success or failure.

"Samsung has now stabilized after reporting a downturn in 2015. Conversely, in 2016 Apple reported its first decline in revenues for over a decade, and the rest of the major brands continue to report flat."

Over the next five years, Futuresource expects an array of new categories to emerge in the CE landscape, including robots for care, domestic assistance and infotainment purposes, as well as innovations within the smart products category.

"Watch out for a new wave of hybridized smart products, hinted at by the capabilities of Sony's Xperia Touch, which has the potential to be a multipurpose home hub, acting as the primary interface for many applications," said Bryant. "The future CE landscape does look challenging, but for the right company with the right approach, the opportunities could be boundless."

Submit to FacebookSubmit to Google PlusSubmit to TwitterSubmit to LinkedInPrint Article